10% penalty exceptions

[cpc0506]

The 10% Penalty exception for Distributions applies to employees who terminate employment during or after that year in which they turn age 55. I get that.

But what happens when the PLAN terminates? Do those who are age 55 get an exception? And what date to use – plan term eff date or plan distribution date?

[Guest Sieve]

That exception applies only if the individual terminates employment, so it does not apply simply if the plan terminates and the individual continues in employment.

[cpc0506]

Thanks for your reply.